bayer cropscience ltd investor meeting september 2014 · bayer materialscience business areas • a...

Investor PresentationBayer CropScience Ltd., India

September 12, 2014

Slide 1 • Bayer CropScience Ltd. • Investor Presentation September 12, 2014

Content Overview Bayer Global

Bayer Activities in India

Bayer CropScience Ltd. Financials

Market and Bayer CropScience Ltd. Business

• Bayer CropScience Ltd. • Investor Presentation September 12, 2014Slide 2

Our Mission

“Bayer: Science For A Better Life”

• We are improving people’s quality of life by preventing, alleviating or curing diseases.

• We are helping to provide an adequate supply of high-quality food, feed and renewable plant-based raw materials.

• And our high-tech polymer materials are making significant contributions to factors such as energy and resource efficiency in the areas of mobility, construction and home living.


Full year sales: €40.2 billion

115,487 employees

289 subsidiaries

R&D expenditures: €3.2 billion

As of December 31, 2013 / Employees: June 30, 2014


Life Science sales represent more than 2/3 of Bayer’s sales

HealthCarePharma,Consumer Health 22%

28%

3%

47%

Others

CropScienceSeeds,Crop Protection

MaterialSciencePolyurethanes,Polycarbonate

Sales2013


Bayer MaterialScienceBusiness Areas

• A transparent, tough and heat resistant high-performance material for e.g.‒ Automotive lighting and

exterior/interior parts

‒ Electrical distribution (low voltage) equipment

‒ Construction roofing for day lighting & heat management

‒ Thinner, lighter mobile devices in consumer electronics

‒ Medical devices and consumer products

• Polyurethane is a foam material with wide variation of tailored properties

• Rigid foams are used for insulation in construction, refrigerators and other cold chain applications

• Elastic foams are used for furniture, mattresses, car and other vehicle seats

• Further applications in the automotive, sports and leisure industry

• Input materials for coatings, adhesives, i.e.– solvent-reduced– solvent-free

• Coating raw materials for vehicles, industrial coatings, corrosion protection and others

• Adhesive raw material for furniture, shoes and vehicles and others

PolycarbonatesCoatings, Adhesives,SpecialtiesPolyurethanes


Bayer HealthCareBusiness Areas

Consumer Care Medical Care Animal HealthPharmaceuticals

• Farm animalproducts

• Companion animal products

• Diabetes Care: monitoring systems and accessories

• Radiology & Interventional: Contrast agents, devices for diagnostic imaging and medical therapy

• Non-prescriptiondrugs

• Vitamins and nutritional supplements

• Rx Dermatology

• General Medicine

• Specialty Medicine


Bayer CropScienceBusiness Areas

• Insecticides

• Fungicides

• Herbicides

• SeedGrowth

• Vegetables seeds

• Seeds for agricultural crops(canola/oilseed rape, cotton, rice, soy)

• Traits

• Professional Products

• Consumer Products

Crop Protection Seeds Environmental Science


Innovation at Bayer Addressing Unmet Market Needs

In line with our mission “Bayer: Science For A Bett er Life”

Challenges Our Approach Innovation Highlights

Increasing quality of life,scarcer resources

Bayer MaterialScience:New applications for high-tech materials and leading-edge processes technology

Process advances:• Using CO2 as a component

of synthesis• Oxygen-depolarized cathode

technology for the production of chlorine from salt

Important launches:• Xarelto™• Eylea™• Stivarga™

Growing need for food,feed and renewable resources

Bayer CropScience:Solutions tailored to customer requirements, from seed to shelf

Important launches:• Alion™• Poncho™ / Votivo™• Xpro™ family

Increased demand in growth markets, higher life expectancy, increasing requirements on healthcare industry

Bayer HealthCare:Improving the health of peopleand animals; break-through innovation for diseases with a high medical need


Sustainability is an Integral Part of the Corporate Strategy

For us, sustainability means striking a

balance between economic growth and

ecological and social responsibility.

The Bayer Group’s sustainable alignment is based on responsible business practices such as:

• High standards in occupational, process and plant safety

• Product stewardship across the entire value chain

• Responsible marketing

• Stringent compliance and anti-corruption directives

• Future-oriented human resources policy

• Strict supplier management


ContentOverview Bayer Global





History of Bayer in India (1/2)

Bayer began its journey in India in 1896. Over a period of time, it has adapted itself to this culture-rich nation and established itself as a Company that manufactures world-class products.

1896 First wholly-owned subsidiary of Bayer in Asia “Farbenfabriken Bayer and Co. Ltd.” is

set-up in Mumbai

1958 Bayer establishes Bayer Agrochem Private Limited in India

1963 The name of Bayer Agrochem changes to Bayer (India) Limited

1969 The company commences operations of a major plant in Thane

2002 Bayer acquires Aventis CropScience

2004 First Imidacloprid production facility outside Germany is inaugurated in Vapi

2005 Lanxess AG is spun off from the Bayer Group

2005 New nematicides plant is inaugurated in Ankleshwar


History of Bayer in India (2/2)

2007 Bayer MaterialScience (BMS) Polyurethane Systems House commences operations

in Greater Noida (GN)

2009 Bayer Technology Services opens its first office in India at Thane

2011 Eco Commercial Building in GN as Bayer’s first emissions-neutral office building in Asia

2011 Bayer Zydus Pharma a 50:50 joint venture between Bayer HealthCare and Zydus Cadilla

2011 BMS inaugurates the Color Competence and Design Center in GN

2011 BMS inaugurates a new aromatic and aliphatic polyisocyanate (PIC) facility

2013 Bayer BioScience opens a new Mustard Breeding Station in Palwal, Haryana

2013 Bayer BioScience opens a multi-crop breeding station in Chandippa, near Hyderabad

2014 New Headquarters of Bayer in India inaugurated at Thane


MaterialScience and HealthCareLegal entities in India

Slide 14

Bayer Zydus Pharma Pvt. Ltd.Marketing and distribution of pharmaceutical products.

Bayer Pharmaceuticals Pvt. Ltd .Third Party Manufacturing of Pharma and Animal Health products, Marketing and distribution of animal health and diabetes care products.

Bayer MaterialScience Pvt. Ltd.Manufacture, Marketing, Sales and distribution of High Tech Polymers of Polyurethanes, Polycarbonates, Coatings & Adhesives

• Bayer CropScience Ltd. • Investor Presentation September 12, 2014

CropScience Legal entities in India

Slide 15

Bayer Bioscience Pvt. Ltd .

Nunhems India Pvt. Ltd.

Bayer Vapi Pvt. Ltd.Manufacture of active ingredients and its intermediates for use in a wide array of agriculture and environment protection products. Core site for BCS global.

Development, production, conditioning, marketing and sales of vegetable seeds.

Research, development, production , conditioning and marketing of high quality hybrid seeds for field crops

Bayer CropScience Ltd.

Manufacture, Sales and distribution of insecticides, fungicides, herbicides and various other agrochemical products.Sales and Distribution of high quality hybrid seeds for field crops.Environmental Science deals in non-crop pest management and Industrial Vegetation Management


PY Domestic Sales Exports Other OperatingIncome

Other Income CY

Strong revenue growth in Q1 mainly on account of Crop Protection sales

12,216

Q1 Apr–Jun 2014-15

Q1 Apr–Jun2013-14

(INR Mio)

2011-12 2010-11

(Change over Previous year)

Domestic Other Operating Revenue

Export Other Income

18% 52% 32% 10% 21%

10,108

69531 221,530

21% Net Sales 2,061

2014-15 2013-14

As % to Total Revenue

83 85

1311

2 2

2 2


PY Gross Profit Other Operating& Other Income

Employees Cost(CY 6% / PY

7%)

Other Expenses(CY 11% / PY

8%)

Dep. & Fin.Chrg(CY 1% / PY

2%)

CY

Q1 Apr–Jun2013-14

(13.7% to Net Sales)

1,320

1,599223

3

106564

20% 19% 17% 3%

Gross Profit

Employee Expenses

Depreciation & Finance Cost

Other Expenses

2014-15 2013-14

% to Net Sales

29 29

6 6

13 13

1 1

(INR Mio)Other Operating & Other Income

4 5

11%

21%

* Profit before Exceptional Items & Taxation

Q1 Apr–Jun2014-15

(13.6% to Net Sales)

Profitability* growth in line with sales growth

(Change over Previous Year) 47


6

16

12

1157

8

35

June 30, 2013

(INR Mio, Figures in chart %)

Shareholders Funds 20,189

Fixed Assets 3,739

Others 2,969Other Liabilities & Provisions 4,202

Trade Receivables 7,191

Inventory 6,264

Cash & BankBalance 9,025

Trade Payables 4,797

Cash position reduced due to distribution of funds to shareholders

29,188

58

15

13

9810

32

Fixed Assets3,114, -17%

June 30, 2014

Others 5,017, 69%

Other Liabilities & Provisions 4,764, 13%

Trade Receivables8,925, 24%

Inventory 7,763, 24%

Cash & Bank Balance 4,332, -52%

Trade Payables 5,879, 23%

29,151

Shareholders Funds 18,508

-8%


Southwest Monsoon Season 2014

• Monsoon onset delayed by 20 days

• June rainfall 43% below normal, sowing delayed

• Sowing picked up with late July rainfall

• Jun - Aug rainfall still 17% below normal

• All regions still show deficit rainfall

• Sep rains critical for consumption

• 85% of LY

• 5% above

normal*

* 10 year average

0%

7%

-10%-7%

-15%

-10%

-5%

0%

5%

10%Rice Cotton Soybean Pulses

Reservoir Level Status (as on 21 st Aug)All India Monsoon Update

Sowing Status OLY* (as on 22 nd Aug)

Slide 21

* Over last year


Key market impacts 2014

• Key market drivers fully in place

• Positive indications for the development of agriculture by the new government

• Increased Minimum Support Prices

• Attractive farm gate prices

• Increasing availability and acceptance of innovations

• Delayed monsoon results in reduced acreages in Kharif (soya, cereals, pulses)

• Higher channel inventories

• Possible threat of El Nino in September

• Regulatory delays continue in general

• Rabi season depends on water availability

• Market growth expected mid-high single digit

ChallengesOpportunities


Bayer CropScience mastering opportunities and challenges in 2014

• Fungicides and Insecticides drive growth in Crop Protection (e.g. Nativo™, Antracol™, Regent™)

• Good sales of Arize™ Paddy Hybrid seeds

• Excellent response to new Surpass™ Cotton Hybrid (First Class™)

• Contingency plans for Kharif in place to counter weak monsoon

• Good response to Rice mechanical transplanting project started in South

• Bayer expands Integrated Crop Solution “Bayer Labhsutra”

• Value added pricing revision

• Launch of SeedGrowth Raxil Easy™

• Delays in product registration may impact sales

• Moderate increase of channel inventories due to slow season

LowlightsHighlights


Bayer CropScience has a strong presence in all market indications

Bayer CropScience portfolio contribution (domestic sales 2013)

55%

24%

17%

4%

Total market India – split by indications 2013 1)

48%

21%

29%

2%

1)Source: Bayer CropScience internal estimates

Insecticides

Fungicides

Herbicides

Seed Growth

Bayer CropScience has a strong presence in insecticides, fungicides and seed growth. Bayer CropScience’s product pipeline will strongly support growth in herbicides.


Innovation: the core of Bayer CropScience India50 launches since 2001 and >12 projects from 2014 to 2016

2012

2001

2002

2009

2010

2013

2003

2011

2008

2007

2000

20062005

2014 2015 n Beyond

SP 7007 BGIISP 1171 BGII

SP 5147 BGII

Arize Prima ArizeH158Millet 9477

Mustard 5450

Mustard 2105Millet 9444F

Biologics

Millet, Mustard, Cotton & Rice Hybrid SeedsSlide 25 • Bayer CropScience Ltd. • Investor Presentation September 12, 2014

Bayer CropScience India - holistic approach to sustainable agriculture offering integrated crop solutions

Challenges

• Weed, pest & diseasecontrol

• Resistance management

Sustainableintensificationof agriculture

Benefits

Across the food value chain

• Integrated Pest Manage-ment (IPM)

• Good Agricul-tural Practices (GAP)

• Yield & Quality

• Tradeability

• Convenience

Contribution to Food Security

• Higher yield• Higher quality• Convenience• Market Access• Risk Management

GROWERDEMAND

• Rice• Cotton• Millet• Mustard • Vegetables 1)

• Fungicides• Insecticides• SeedGrowth

products

• Extension field service

• Optimizing yield and quality (Labhsutra)

• Bayer Solutions + Advisory

• Herbicides• Fungicides• Insecticides• SeedGrowth products

1) Marketed through Nunhems India Pvt. Ltd.; 2) Portfolio under development


Integrated solutions help boost farmer’s prosperity

• > 3400 field trials

• Focus crops: Rice, Cotton, Fruits & Vegetables

• Average ~20% income increase

Cotton Paddy

15%

10%

20%

12%

Incremental Yield Incremental profit


Benefits of SeedGrowth treatment:• Reduced application rates per unit area• Better plant stand• Plant protection from day one• Makes basis for higher yield

SeedGrowth: the most targeted and efficient method of crop protection


Summary

� Strong fundamental drivers positively determine adoption of innovations, productivity improvement & growth

� Bayer CropScience is strongly committed to bring in novations to the Indian Farmer

� Empowering farmers with a variety of solutions means transferring knowledge and demonstrating benefits

� New technologies for shared value creation are based on integrated solutions

� Monsoon highly influences annual agricultural input and output

� Stronger partnership and coordination between public and pr ivate stakeholders required

Bayer CropScience is strongly committed to bring innovation to the Indian farmers’

doorstep…… from “lab to land”


Disclaimer

Forward-Looking Statements

This presentation contains forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual assets, financial position, earnings, development or performance of the company and the estimates given here. These factors include those discussed in Bayer’s public reports, which are available on the Bayer website at http://www.bayer.co.in/. The company assumesno liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

Legal Notice

The product names designated with ™ are brands of the Bayer Group or our distribution partners and are registered trademarks in many countries.


Thank You

bayer cropscience ltd investor meeting september 2014 · bayer materialscience business areas • a...

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